SILICON VALLEY BILL: Rep. Baronda files Metro Iloilo Ecozone measure

By: Francis Allan L. Angelo

“Gugma ko, paskwa nyo.”

This is how Iloilo City Lone District Rep. Julienne Baronda described House Bill 5794 or the proposed “Metro Iloilo Special Economic Zone and Free Port Act of 2019” she filed in the House of Representatives on Dec 11, 2019.

The proposed legislation seeks to create a “critical and vital economic hub that will bring positive change for the City of Iloilo and for the entire Western Visayas through jobs generation and investments.”

“Our economy is doing good and we want to further boost it. So we crafted this bill so that when passed into law, it will open the doors of our city and the region to new investors so that we can create more and long-term job opportunities for our fellow Ilonggos. I promised to give our people work in the last elections and I am making true that promise,” Baronda told Daily Guardian in an exclusive interview.

The proposed economic zone and free port will be the first in Western Visayas and the entire Visayas. It will cover Barangays Loboc, Ingore and San Isidro in La Paz District, and Barangays Bitoon and Balabago in Jaro.

With the vision of making Iloilo City as the Silicon Valley of the Philippines, the bill will entice information technology-related investments but would also attract medical tourism, retirement villages, manufacturing, agriculture and fisheries processing, energy, service, and export enterprise, among other sectors and emerging industries.

Silicon Valley is a region in the southern part of the San Francisco Bay Area in Northern California that serves as a global center for high technology, innovation, and social media.

The Metro Iloilo Economic Zone and Free Port also complements the Philippine Development Plan 2017-2022 that “intends to place regional development at the center of our socioeconomic development strategy. By creating more jobs, improving social services, encouraging innovation and connecting the countryside to growth centers, we will reduce poverty and accelerate development in rural areas.”

“We have been largely dependent on the agriculture and services sectors all this time. Now we want to expand. We want to diversify. We will attract the investors if we offer them a great business and investment climate, if we offer them good prospects for success. And that is through this ecozone. Our workforce is our best come-on next to the tax incentives. The Ilonggos are known to be intelligent and hardworking people,” Baronda explained.

The first-termer congresswoman added, “We chose the coastal area so that the entry and exit of raw materials as well as finished products would be very easy. We have the international port that I heard will be expanded. Infrastructure linkages and access to ports of entry and exit are primordial considerations to investors.”

 

Under the bill, a tax rate of five percent (5%) on Gross Income Earned will be collected from the locators with no other local or national taxes to be imposed.

The enterprises to be registered with the economic zone authority may enjoy the income tax holiday or the net operating loss carryover prior to the availment of the GIE.

All fiscal incentives under the proposed law will be terminated after a cumulative period of 20 years from the date of registration or the start of operation.

According to the National Economic and Development Authority’s (NEDA) West Visayas 2018 Socioeconomic Report, the employment rate in the region remained high in 2018 at 94.7% with the unemployment rate slightly decreasing by 1.85 percent.

The number of underemployed persons or employed persons, however, “who expressed desire to have additional hours of work in their present job or to have additional job or to have a new job with longer working hours increased by 11.38 percent.”

The same report underscored that “the BPO Industry, considered as one of the job generators for Western Visayas, employed 21,500 workers in Iloilo City. However, there is still a need to attract more investors especially along manufacturing areas in order to generate more employment opportunities and ultimately decrease the 18.6 percent unemployment rate.”

Western Visayas registered slower growth in all sectors in 2018 with Agriculture, Fishery, Forestry decreased by 1.4% from 8.8% in 2017; Service decreased from 8.5% to 7.5%; Industry 8.7% in 2017, to 8.6% in 2018; although Manufacturing increased minimally from 4.1% to 4.7%, showed the NEDA West Visayas 2018 Socioeconomic Report.

The proposed ecozone bill seeks to beef up employment in Western Visayas.

“If a locator spends P100 million in capital and we are able to attract 20 locators, that means the ecozone will have P2 billion worth of investments. These investments can open up to 12,000 jobs to the people of Iloilo City and provinces around Western Visayas,” Baronda added.

The first lady representative of Iloilo City said the bill may face challenge but she is determined to realize her plans on her first 3-year term.

“They say that creating an economic zone is an uphill battle but we are determined to hurdle that challenge and do something significant for our people, a development strategy that will bring breakthrough results. We cannot just roll over and die. We need to wage a struggle and who knows the economic managers and President Duterte will give us their approval because this is a necessity in our region,” Baronda said.

The bill titled “An Act Creating A Special Economic Zone and Free Port in the City of Iloilo, Creating for this Purpose the Metro Iloilo Special Economic zone and Free Port Authority, Appropriating Funds Therefore, and for Other Purposes” is expected to be calendared for first reading in January 2020.

It will be referred to a committee that will scrutinize it. Once approved in the committee, it will be tossed back to the entire members or the plenary for their votes. A counterpart measure is expected to be pushed in the Senate and then the approval of the President will be sought.

Baronda said she wants a long-term solution to the employment concern of the Ilonggos. Employment is one of the four problem areas that she wants to address under her H.O.P.E. [Health, Obra, Peace and Order, Education] governance platform.